27 April 2020
How to Improve Your Credit Score with your Rental Payments
If you are looking to buy a house, one of the most important things to consider is your credit score, which will be used by banks to determine whether you get a mortgage or not.
For many first time and young buyers, this can be a problem.
Credit scores are based on a number of factors which contribute to a score out of 100, which if too low, will mean you can’t buy a home.
There are a number of things which you can do to improve your credit score, such as paying off your credit cards on time and ensuring that all of your direct debits are paid on time, such as your bills.
However, even if you do all of these things, it may take months for your credit score to increase by a few points.
But did you know that you can use your own monthly rental payments to increase your credit score?
Let’s be honest, nobody likes paying rent, especially if you live somewhere like London where sending £800 to a landlord really drives the concept of ‘dead money’, home.
Paying rent via direct debit to a private bank account does nothing for your credit score.
However, using a credit agency to ledge your rental payments on your behalf will.
Effectively, if you set up a line of credit with an agency and pay them your rent each month, they will then send the money on to your landlord. The amount of money stays the same and nothing really changes, except that your money will now be registered and the money you pay rent will be on record when a credit check is made.
This does not happen if you simply pay a landlord directly.
It’s a ‘no brainer’ for people trying to get on the property ladder as millions of people get trapped in the endless cycle of paying rent without getting anything more from their money.
If you would like to understand how to make use of this service, get in touch with a member of our team.